Navigant Research Blog

Solar Market for Base of Pyramid Not So Pico

— April 14, 2014

In an upcoming report on pico solar lighting products (<10W) and solar home systems (<200W) sold primarily to rural communities in Africa and Asia, I cover the unit sales, revenue, and capacity of these small solar photovoltaic systems globally.  One of the most important trends covered in the report is that pico solar has transitioned from a humanitarian aspiration to big business – more than $100 million in 2014.  Corporate involvement in rural electrification has traditionally come in the form of corporate social responsibility initiatives, but real money is now flowing to solar companies serving the base of the pyramid market.  The success of a number of off-grid solar lighting companies and social enterprises has attracted interest from major corporations such as Panasonic, Schneider Electric, and Philips, as well as funding from investors.  Some of the more notable investments include:

  • In early 2014, d.light raised $11 million in Series C funding from DFJ, Omidyar Network, Nexus India Capital, Gray Ghost Ventures, Acumen Fund, and Garage Technology Ventures.  The company is one of the leading pico solar manufacturers, and has now raised $40 million and sold an estimated 6 million pico solar systems reaching 30 million people.
  • In early 2014, Persistent Energy Partners acquired Impact Energies, a pay-as-you-go, off-grid solar service provider working in West Africa that has reached 30,000 customers since 2011.  The renamed company, Persistent Energy Ghana, installs village solar microgrids and solar home systems.
  • In late 2013, Khosla Impact invested $1.8 million in a Series A round with BBOXX, a U.K.-based company that sells portable solar kits ranging from 7W to 185W and plug-and-play solar systems that range between 2 kW and 4 kW.  The company also provides a mobile pay-as-you-go service enabled by remote battery monitoring, which was the primary interest of Khosla.
  • In 2012, Greenlight Planet, one of the leading designers and distributors of solar light-emitting diode home lights, raised $4 million from Bamboo Finance and Dr. P.K. Sinha, co-founder of ZS Associates.  The investment followed previous financing by Dr. Sinha.  Greenlight Planet has sold more than 1.8 million solar lamps since the company was founded in 2008.
  • In 2012, Barefoot Power, one of the largest pico solar manufacturers, raised $5.3 million from three social investment funds (d.o.b. Foundation, ennovent, and Insitor Fund), existing shareholders (The Grace Foundation and Oikocredit Ecumenical Development Cooperative), and a number of private angel investors.

The full report will be released in the next few weeks.  It will discuss industry market drivers and challenges, and includes more than 20 company profiles and country-specific forecasts from 2014 to 2024.

 

LED Revolution Rises in the West

— March 17, 2013

The market for light-emitting diodes (LEDs) has reached the turning point from “promising technology” to “practical mainstream solution.”  The replacement of 125-plus years of vacuum tube lighting by LEDs seems as inevitable as the transition from TV tubes to flat screen LED monitors, though it won’t happen nearly as quickly.  But even as we witness this shift, I wonder if we really perceive the revolution taking place.

That revolution was evident at last month’s Strategies in Light conference, in Santa Clara, which focused on LED  technologies and, more specifically, LEDs applied to lighting applications.  Since this year marks the 50th anniversary of the invention of the visible LED, the program included an awards ceremony honoring industry pioneers Nick Holonyak Jr., M. George Craford, Roland Haitz, and Shuji Nakamura.  It was a rare window into history.

The conference also demonstrated that LED lighting R&D activity is overwhelmingly focused on achieving some degree of parity with conventional lighting in terms of light quality and cost, while still delivering on the energy efficiency and long life-cycle potential of LEDs.  Just as anyone seeking “plain white paint” is confronted by thousands of options at their neighborhood paint shop, “white light” is far from a neutral, standard attribute for lighting.  How a given light source’s color temperature maps against the standard Planck curve is just the beginning of a light quality assessment.  The facts are that LED lighting can be made very efficient, have good light quality, last a very long time, and be cost-effective.  But it’s exceedingly rare that all four of these goals are met simultaneously in a given application. Hence there’s much work to be done, justifying the focus on achieving parity and conventional lamp replacement.

Beyond Tubes

Beyond the focus on parity and replacement, however, are opportunities that are potentially much more transformative. Although the transistor radios of my youth seemed a major innovation compared with the vacuum-tube radios of a decade earlier, the real power of transistors came in the form of integrated circuits that unleashed a much larger information and communications revolution.  In a presentation titled “The Next Evolution of Lighting,” Brad Koerner, director of experience design at Philips Lighting, showed how LEDs are ushering in a new paradigm for lighting design, controllability, and occupant experience.  LED lighting form factors that mimic fluorescent tubes might make sense for today’s lamp replacement market, but they’ll probably look silly in retrospect when lighting is integrated into the very surfaces of next-generation buildings.  Today’s lighting programmability essentially means on, off, or dim – but what happens when lighting color temperature is also programmable, allowing sunlight’s subtle differences by time of day, season, or geographic location to be carried indoors to our work and living spaces?

We are only at the cusp of these revolutions today.  In the meantime, all those concerned with smart buildings, from architects to facility managers, should balance their healthy skepticism with a dreamer’s wonder at what may soon be.

 

LIFX Reinvents the Light Bulb

— September 24, 2012

Have you ever thought about “experiencing” your light bulbs?  Not many of us would admit to it, but a couple of guys from a Melbourne garage did, and they are redefining the soul of lighting applications in a way unseen since the Savoy Theatre first lit up in the late 1800s.  Their goal is to make energy-efficient light bulbs sexy.  Launched on Kickstarter on September 15th, 2012, the project, “LIFX: The Light Bulb Reinvented,” has already pulled down $1.3 million from almost 9,000 backers – and the funding period runs until November 14th.  Since their initial goal was to raise $100,000 to back the first release of “the smartest light bulb you’ve ever experienced,” it looks like the LIFX Labs dream of reinventing the light bulb may become a reality.

Basically, Bosua has applied the Internet model of persistent connectivity to illumination.  LIFX uses both WiFi (802.11n) and IEEE 802.15.4 (which ZigBee also employs) to create a mesh network of light bulbs that are efficient (LED lights are highly energy efficient and have a long service life), multi-colored, and can be finely controlled with an iPhone or Android device.  To create the network, a master bulb connects to a standard router, which then communicates with all the other bulbs in the network using the open LIFX protocol.  The company plans to provide a software development kit and a hacker kit, so app developers will be able to create new experiences for the owners of LIFX bulbs.

Driven to reduce the wastage created by existing lighting technologies, Phil Bosua, the inventor of LIFX, tapped into the secret of creative explosion — he got out of the way.  When I talked to Bosua, I was struck by how he and his team put their biases aside to associate seemingly unrelated concepts to help create a better light bulb design:  light switches are boring, smartphones are cool, saving money is good, and mood lighting is sexy.  Bosua says, “The guiding force wasn’t cleantech, but to make a light bulb that fit into the culture.  The cleantech technology happened to be the best technology.”

Utilities and social scientists have been trying to figure out for years how to engage consumers in taking energy efficiency measures, including giving away compact fluorescent lightbulbs (CFLs).  And, to be sure, it’s likely that (at least initially) LIFX will be out of reach for many homeowners at about $69 a bulb, or in a kit of 1 master and 3 slaves for about $49.00 for each bulb.  However, unlike with CFLs, which have strange colors, long run-up time and excitable mercury vapor, with LIFX LEDs we can anticipate energy savings of up to 75% to 80%, have access to control applications from our favorite app store, enjoy high quality light, and avoid shopping for new bulbs for 25 years.

Without expensive studies and pilots, LIFX understood the emerging home environment as the context for their market.  After all, when’s the last time you got off your couch to change the channel?  Why shouldn’t it be the same for the lights in our homes?  The Kickstarter audience overlaps precisely with the demographic adopting smartphones in increasing numbers.  By imaginatively and emotionally connecting with their potential market, LIFX turned on thousands of people willing to give their attention and money to their cause – and may turn on energy-efficient lighting in the process.

 

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